courtesy : pwc

An item for the executive agenda

Sustainability is a highly relevant topic with a substantial impact on businesses and their stakeholders. Stronger consideration of sustainability in society, economy and environment has led to a major rise in responsible investments. More and more governments and institutions are pledging to back a United Nations campaign aiming for net-zero greenhouse gas emissions, thereby affecting how companies do business.

Being a sustainable company means to understand and actively manage the environmental, social and governance (“ESG”) impact along your value chain, and ensuring that your company’s business model will remain viable in the future. The United Nations 17 Sustainable Development Goals provide a framework and guidance for this. Companies need to focus on those aspects which are most important to them.

“As far as sustainability is concerned, many companies still rely too heavily on regulatory compliance. This aspect is certainly vital to keeping a licence to operate. But it’s important to move beyond: integrating sustainability into a company’s strategy, operating model and day-to-day processes makes it possible to unleash the full potential that sustainability offers for value creation. That’s why sustainability should be discussed in the boardroom of every company.”

Ruirui Zong-Rühe, Director, PwC Strategy&

CEOs need to understand the five imperatives of this new economic order and act now

Sustainability is non-negotiable for a company’s licence to operate and is a C-level topic.
A company’s ability to create value in the future depends on how well ESG criteria are integrated into the corporate strategy.
The ability to access capital on competitive terms in the future increasingly depends on a company’s ESG performance.
Investors and other stakeholders are increasingly demanding transparent, reliable information on ecological and social aspects, and on the progress made by a company in achieving the goals set.
Companies will have to take credible strides in living up to their sustainability goals – otherwise they risk suffering a major dent in their reputation.

A holistic approach is necessary

It takes a holistic approach to integrate sustainability within all aspects of a business – and a tailored strategy for every company. Companies currently find themselves at completely different points along their ESG transformation journey, dealing with manifold issues and challenges. But they all have one thing in common: to successfully transform themselves into a sustainable company requires a holistic approach to their strategy, operating model and management system. In addition, companies need to focus on a set of functional aspects depending on their strategic agenda.